A limited constitutional government calls for a rules-based, freemarket monetary system, not the topsy-turvy fiat dollar that now exists under central banking. This issue of the Cato Journal examines the case for alternatives to central banking and the reforms needed to move toward free-market money.

The more widespread use of body cameras will make it easier for the American public to better understand how police officers do their jobs and under what circumstances they feel that it is necessary to resort to deadly force.

Americans are finally enjoying an improving economy after years of recession and slow growth. The unemployment rate is dropping, the economy is expanding, and public confidence is rising. Surely our economic crisis is behind us. Or is it? In Going for Broke: Deficits, Debt, and the Entitlement Crisis, Cato scholar Michael D. Tanner examines the growing national debt and its dire implications for our future and explains why a looming financial meltdown may be far worse than anyone expects.

The Cato Institute has released its 2014 Annual Report, which documents a dynamic year of growth and productivity. “Libertarianism is not just a framework for utopia,” Cato’s David Boaz writes in his book, The Libertarian Mind. “It is the indispensable framework for the future.” And as the new report demonstrates, the Cato Institute, thanks largely to the generosity of our Sponsors, is leading the charge to apply this framework across the policy spectrum.

Tag: individual mandate

Many have speculated that the Obama administration isn’t prepared to roll out ObamaCare. Some have speculated that even if the administration were prepared, the rollout would still be chaotic with job losses, rate shock, employer dumping, and the like. But since the Obama administration has been remarkably secretive about the status of its implementation efforts, no one has a better perspective on its preparedness, and the potential for chaos, than the administration itself. That’s why the decision to delay the implementation of ObamaCare’s employer mandate for one year is so illuminating.

Implementing the law without the employer mandate will definitely be very chaotic. (How can the federal government determine eligibility for the law’s subsidies if it doesn’t know whether workers received an offer of adequate coverage from an employer? Will the delay cause even more employers to drop coverage? Will it lead to some workers not receiving subsidies who otherwise would? Will employers’ and workers’ responses to the delay affect the risk profile of those who seek coverage through the exchanges? If so, how will that affect insurers, who have already filed their rates based on the assumption that the employer mandate would be in place? Will this delay lead to more delays, and ultimately to repeal? Will it increase political pressure for repeal of the individual mandate?) The whole purpose of the employer mandate was to reduce the economic and political upheaval that the rest of ObamaCare will unleash.

The decision to delay this mandate suggests that, from the Obama administration’s uniquely informed vantage point, the chaos that will result from its delay will be less than what would result from implementing it when the law requires. The administration doesn’t go around looking for ways to make implementation harder. This decision can only be understood as an effort to take the path of least resistance – and if this is the path of least resistance, then ObamaCare itself must be even more chaotic. This decision is the best window we have to see how nervous the administration is about what lies ahead.

People in 36 of Mississippi’s 82 counties may not be able to buy health insurance through the new federal online marketplace when it starts enrolling customers in October. Insurance Commissioner Mike Chaney says two insurers have announced offerings so far, planning to serve 46 counties.

Unless more companies sign up or the existing companies expand their plans, consumers in the remaining counties won’t be able to buy health insurance through the online exchange. Coverage under those policies begins Jan. 1.

“I don’t know what to tell you about the other 36 counties,” Chaney told The Associated Press in a phone interview this week. “You’re just out of luck.”

That means they won’t be able to use federal tax credits offered to consumers with incomes of between 133 percent and 400 percent of the federal poverty level. That’s up to about $46,000 for an individual and about $94,000 for a family of four, with those at the top end getting little or no subsidy.

People who don’t buy insurance are required to pay a $95-a-year penalty starting in 2014. A spokeswoman for the U.S. Treasury Department couldn’t immediately say Thursday whether people would be penalized in counties without offerings.

My reading of the statute is that this should have little effect on the penalties that Mississippians face under Obamacare, since the state’s refusal to establish an exchange has already exempted 128,000 residents from penalties under the individual mandate, and all Mississippi employers from penalties under the employer mandate.

But assuming the IRS gets away with illegally offering Obamacare’s penalty-triggering “premium assistance tax credits” in states that have refused to establish exchanges, Mississippi employers cannot be penalized for failure to provide “affordable” health insurance to residents of those 36 counties because without any exchange at all, those residents will not be able to receive the tax credits. But employers could be penalized for failing to provide those residents “minimum value” coverage–if a firm employs even a single person in one of the other 46 counties that do receive such a tax credit.

Individuals would still seem to be subject to the individual mandate as they otherwise would. But without an exchange, fewer of them would qualify for the unaffordability exemption from the individual mandate, because there would be no “annual premium for the lowest cost bronze plan available in the individual market through the Exchange” with which to calculate whether they are eligible for that exemption. Of course, the federal Department of Health and Human Services could just throw residents of those counties a hardship exemption.

The IRS is attempting to tax, borrow, and spend more than $800 billion over the next 10 years without congressional authorization, and indeed in violation of an express statutory prohibition enacted by both chambers of Congress and signed into law by President Obama.

By offering the [Patient Protection and Affordable Care Act’s] subsidies in states that have not set up [health insurance] exchanges, the federal government is inflicting tax penalties on individuals and employers that go beyond even what Obamacare allows…

Pruitt v. Sebelius has been supplemented by a lawsuit filed last month by a group of small businesses and individual taxpayers also challenging the IRS’s authority to impose penalties outside of state-created exchanges…

Stopping the IRS from imposing punitive taxes where it has no legal power to do so should in fact be a popular and bipartisan issue, regardless of one’s opinions about the ACA itself…

Republican governors, attorneys general, and state legislators looking to use their offices to the significant benefit of the nation as a whole should be lining up to create a 30-state united front with Oklahoma. Scott Pruitt is fighting for the rule of law, and Republican governors might trouble themselves to give him a hand.

Click here for information on an upcoming Cato policy forum on Halbig v. Sebelius, the legal challenge filed by several small businesses and taxpayers.

Ever since Obamacare became law, I have been counseling states not to establish the law’s health insurance “exchanges,” in part because:

to create an Exchange is to create a taxpayer-funded lobbying group dedicated to fighting repeal. An Exchange’s employees would owe their power and their paychecks to this law. Naturally, they would aid the fight to preserve the law.

California was the first state both to reject my advice and to prove my point.

They claimed that health plans offered through Covered California in 2014 will cost the same or less than health insurance costs today. “The rates submitted to Covered California for the 2014 individual market,” they wrote, “ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”

See? No rate shock. California’s top Obamacare bureaucrat, Peter Lee, declared his agency had hit “a home run for consumers.” Awesome!

Unfortunately, anyone who knows anything about health insurance or Obamacare knew instantly that this claim was bogus, for three reasons.

Obamacare or no Obamacare, health insurance premiums rise from year to year, and almost always by more than 2 percent. So right off the bat, the fact that Covered California claimed that premiums would generally fall means they’re hiding something.

Obamacare’s requirement that insurers cover all “essential health benefits” will force most people who purchase coverage on the “individual” market (read: directly from health insurance companies) to purchase more coverage than they purchase today. This will increase premiums for most everyone in that market.

Obamacare’s community-rating price controls (also known as its “pre-existing conditions” provisions) will increase premiums for some consumers (i.e., the healthy) and reduce premiums for others (i.e., the sick). So it is misleading for Covered California to focus on averages because averages can hide some pretty drastic premium increases and decreases.

As Jonathan Adler and I explain in this law journal article, and as I explain somewhat more accessibly in this Cato paper, the IRS is trying to tax, borrow, and spend $800 billion in clear violation of federal law and congressional intent.

Secretary of Health and Humans Services Kathleen Sebelius has been making the rounds on Capitol Hill, testifying in favor of President Obama’s proposed budget and generally trying to assure members of Congress that all is well with ObamaCare implementation. Even supporters of the law are freaking out nervous, as I discuss here.

Since everyone else is pestering Sebelius with questions, I thought I would post some questions I would like to hear her answer.

3. Refusing to create an exchange potentially protects a state’s businesses from the law’s employer mandate.Obamacare fines any business with 50 or more employees that does not offer health coverage of sufficient value—as determined by the federal government—$2,000 per employee (exempting the first 30 workers). The employer penalties, however, are triggered by the existence of the law’s subsidies for private health insurance. And as Cannon notes, the text of Obamacare specifically states that those subsidies are only available in states that choose to create their own exchanges. The IRS has issued a rule allowing for subsidies in states that reject the exchanges, but a lawsuit is already under way to challenge it.

4. States also have the power to protect as many as 12 million people from the law’s individual mandate—the “tax” it charges individuals for not carrying health insurance. Obamacare requires that nearly everyone maintain health coverage or pay a penalty—a “tax,” according to the Supreme Court’s decision upholding the law last year. But Obamacare also exempts individuals who would have to pay more than 8 percent of their household income for their share of their health insurance premiums. So if states bow out of the exchanges, and as a result the law’s private insurance subsidies are no longer available, then the mandate will no longer apply to the low and middle income individuals who would have to pay more than 8 percent of their income to get health insurance. Cannon estimates that if all 50 states were to decline to create exchanges, a little more than 12 million low and middle-income individuals would be exempt from the law’s mandate.